Congress to End Fraud-Ridden Tax Credit Program, Expand Child Tax Credit

Savings from the discontinued program, plagued by 95% fraudulent claims, to fund more generous child tax credit for low-income families.

Congress is moving to end the employee retention tax credit program, established during the COVID-19 pandemic, due to widespread fraud.
An estimated 95% of claims made by businesses for the tax break are fraudulent, leading to costs nearly five times the expected $55 billion.
Lawmakers plan to use the savings from ending the program to offset the cost of three business tax breaks and a more generous child tax credit for many low-income families.
The proposed changes to the child tax credit could result in an average tax cut of $680 in the first year for benefiting households.
The IRS has initiated 352 criminal investigations involving more than $2.9 billion in potentially fraudulent claims related to the tax credit program.